Vedanta Gains, Cairn India Slumps 5% on Reports of Merger Plans

Shares of Vedanta rose as much as 1.6 per cent to Rs 180 after reports said that the metal and mining company is considering a merger of its subsidiary Cairn India with itself.

Shares of oil exploration and production company Cairn India however fell 5.8 per cent at its day's low of Rs 170.

The move may give parent Vedanta access to Cairn's cash and help reduce debt. Vedanta Group holds 59.88 per cent stake in Cairn India while British oil explorer Cairn Energy has a 9.8 per cent stake in Cairn India.

Cairn Energy reported cash and cash equivalents of Rs 16,867 crore as on March 31 and its cash flow from operations was at Rs 8,765 crore during FY15. On the other hand, the standalone net debt of Vedanta Ltd was at Rs 36,796 crore as on March 31.

At 10.05 a.m., Vedanta was up 0.65 per cent while Cairn India was down 4.5 per cent. In comparsion, the broader markets were flat.